[Federal Register Volume 69, Number 1 (Friday, January 2, 2004)]
[Rules and Regulations]
[Pages 34-40]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-32212]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA 259-0425; FRL-7598-1]


Revisions to the California State Implementation Plan, San 
Joaquin Valley Unified, Ventura County, Santa Barbara County, and 
Monterey Bay Unified Air Pollution Control Districts and Yolo Solano, 
Bay Area, and Mojave Desert Air Quality Management Districts

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing a limited approval and limited disapproval 
of revisions to the San Joaquin Valley Unified (SJVUAPCD), Ventura 
County (VCAPCD), Santa Barbara County (SBCAPCD), and Monterey Bay 
Unified (MBUAPCD) Air Pollution Control Districts and to the Yolo 
Solano (YSAQMD), Bay Area (BAAQMD), and Mojave Desert (MDAQMD) Air 
Quality Management Districts' portions of the California State 
Implementation Plan (SIP). These actions were proposed in the Federal 
Register on September 20, 2002 and August 8, 2003 and concern volatile 
organic compound (VOC) emissions from architectural coatings. Under 
authority of the Clean Air Act as amended in 1990 (CAA or the Act), 
this action approves local rules that regulate these emission sources.

EFFECTIVE DATE: This rule is effective on February 2, 2004.

ADDRESSES: You can inspect copies of the administrative record for this 
action at EPA's Region IX office during normal business hours by 
appointment. You can inspect copies of the submitted SIP revisions by 
appointment at the following locations:

Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105-3901.
Air and Radiation Docket and Information Center, U.S. Environmental 
Protection Agency, Room B-102, 1301 Constitution Avenue, NW., (Mail 
Code 6102T), Washington, DC 20460.
California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814.
San Joaquin Valley Unified Air Pollution Control District, 1990 E. 
Gettysburg, Fresno, CA 93726.
Ventura County Air Pollution Control District, 669 County Square Drive, 
2nd Floor, Ventura, CA 93003.
Santa Barbara County Air Pollution Control District, 26 Castilian 
Drive, Suite B-23, Goleta, CA 93117.
Monterey Bay Unified Air Pollution Control District, 24580 Silver Cloud 
Court, Monterey, CA 93940.
Yolo Solano Air Quality Management District, 1947 Galileo Court, Suite 
103, Davis, CA 95616.
Bay Area Air Quality Management District, 939 Ellis Street, San 
Francisco, CA 94109.
Mojave Desert Air Quality Management District, 14306 Park Avenue, 
Victorville, CA 92392.

    Copies of these rules may also be available via the Internet at 
http://www.arb.ca.gov/drdb/drdbltxt.htm. Please be advised that this is 
not an EPA website and may not contain the same versions of these rules 
that were submitted to EPA.

FOR FURTHER INFORMATION CONTACT: Yvonne Fong, EPA Region IX, (415) 947-
4117, [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to EPA.

I. Proposed Action

    On September 20, 2002 (67 FR 59229) and August 8, 2003 (68 FR 
47279), EPA proposed limited approvals and limited disapprovals of the 
following rules that were submitted for incorporation into the 
California SIP.

                                            Table 1.--Submitted Rules
----------------------------------------------------------------------------------------------------------------
               Local agency                   Rule No.             Rule title             Adopted     Submitted
----------------------------------------------------------------------------------------------------------------
SJVUAPCD..................................         4601  Architectural Coatings.......     10/31/01     03/15/02
VCAPCD....................................         74.2  Architectural Coatings.......     11/13/01     03/15/02
SBCAPCD...................................          323  Architectural Coatings.......     11/15/01     03/15/02
MBUAPCD...................................          426  Architectural Coatings.......     04/17/02     06/18/02
YSAQMD....................................         2.14  Architectural Coatings.......     11/14/01     01/22/02
BAAQMD....................................          8-3  Architectural Coatings.......     11/21/01     06/18/02
MDAQMD....................................         1113  Architectural Coatings.......     02/24/03     04/01/03
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    We proposed limited approvals because we determined that these 
rules improve the SIP and are largely consistent with the relevant CAA 
requirements. We simultaneously proposed limited disapprovals because 
some rule provisions conflict with section 110 and part D of the Act. 
These rules were all based on the same model--the California Air 
Resources Board's (CARB) Suggested Control Measure for Architectural 
Coatings (SCM)--and as a result, they contain many of the same rule 
deficiencies. These deficiencies relate to the averaging provisions 
incorporated into the rules. The deficient provisions common to all 
seven rules listed in Table 1 include the following:

    1. High-VOC coatings sold under the general sell-through provision 
cannot necessarily be distinguished from coatings sold under an 
averaging program based on the information explicitly required to be 
maintained under the rules. This compromises the enforceability of the 
rules as manufacturers may claim that emissions from coatings sold 
under the sell-through provision should be excluded from averaged 
emissions.
    2. The requirement that manufacturers describe the records being 
used to calculate coating sales under averaging programs is not 
sufficiently specific and represents executive officer discretion.
    3. The rules' language regarding how violations of the averaging 
compliance option shall be determined is ambiguous.
    4. The rules grant the Executive Officer of CARB authority to 
approve or disapprove initial averaging programs, program renewals, 
program modifications, and program terminations, raising jurisdictional 
issues and creating enforceability problems since CARB has not been 
granted authority by the state Legislature under the California Health 
and Safety Code to regulate architectural coatings.
    5. The rules allow manufacturers to average coatings based on 
statewide or district-specific data which makes enforceability more 
difficult and conflicts with other rule provisions which imply that 
averaging will only be

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implemented by CARB and conducted on a statewide basis.

Deficiency 5 was identified in our 2003 proposal (68 FR 47279) 
but not specifically noted in our 2002 proposal (67 FR 59229). This 
deficiency, however, was described in each of the Technical Support 
Documents (TSDs) for the three rules that were the subject of our 2002 
proposal (67 FR 59229) and was a basis for our limited disapproval of 
each of the first three rules listed in Table 1. Because the language 
contained in all seven of these rules is similar and they are all 
components of a larger statewide program, we are now clarifying that 
this last deficiency is a basis for our limited disapproval of all 
seven rules listed in Table 1. Our proposed actions contain more 
information on the basis for this rulemaking and on our evaluation of 
the submittals.
    The deficiencies identified in our 2002 proposal (67 FR 59229) of 
the first three rules listed in Table 1 also differed slightly from the 
deficiencies identified in our 2003 proposal (68 FR 47279) for the last 
four rules listed in Table 1. Other deficient provisions identified in 
our 2002 proposal (67 FR 59229) but not in our 2003 proposal (68 FR 
47279) included the following:

    1. The rules allow the VOC content displayed on a coating to be 
calculated using product formulation data but lack a clear and 
enforceable definition for the term formulation data.
    2. The rules contain typographical errors that make the rules 
confusing to regulated sources and less enforceable.

Based on information received during and after the comment period of 
our 2002 proposal, we no longer consider these to be deficiencies in 
these rules. See Comments and Responses 2 and 8.

II. Public Comments and EPA Responses

    EPA's proposed actions provided 30-day public comment periods. 
During the comment period for the 2002 proposal (67 FR 59229), we 
received comments from the following parties.
    1. Howard Berman, Environmental Mediation, Inc. (EM) representing 
Dunn-Edwards (DE), a California based manufacturer and retailer of 
coatings; letter dated October 17, 2002.
    2. Madelyn K. Harding, Sherwin Williams (SW), a worldwide 
manufacturer of coatings; letter dated October 17, 2002.
    3. Mike Villegas, VCAPCD; letter dated October 17, 2002.
    4. Scott Nester, SJVUAPCD; letter dated October 17, 2002.
    5. Ellen Garvey, Bay Area Air Quality Management District (BAAQMD); 
letter dated October 18, 2002.
    6. Michael P. Kenny, CARB; letter dated October 21, 2002.

We did not receive any comments during the comment period for the 2003 
proposal (68 FR 47279) although we made clear that comments submitted 
on our 2002 proposal would be considered to apply to our 2003 proposal 
where appropriate. The comments and our responses are summarized below.
    Comment #1: EM comments that their client, DE, disagrees, as does 
CARB, with our conclusion that these rules are subject to EPA's 
Economic Incentive Program Guidance (EIP Guidance). DE and CARB filed 
extensive comments as to why these rules do not fall within the scope 
of the EIP Guidance. CARB comments further that the EIP Guidance is a 
non-binding guidance document.
    Response #1: An EIP is any program which may include State 
established measures directed toward stationary, area, and/or mobile 
sources, to achieve emissions reductions milestones, to attain and 
maintain ambient air quality standards, and/or to provide more 
flexible, lower-cost approaches to meeting environmental goals (EIP 
Guidance, page 158). These rules (1) regulate architectural coatings, 
an area source, (2) were submitted to EPA in order to meet the National 
Ambient Air Quality Standards (NAAQS), and (3) allow manufacturers to 
reduce emissions from their products to comply with the requirements of 
the rules in a more flexible and lower-cost manner. Furthermore, these 
rules fall under the category of emission averaging EIPs because they 
enable a source, in this case a particular coating, emitting above its 
allowable emission rate limit to comply with that rate limit by 
averaging its emissions with a second source, a different coating, 
emitting below that second source's regulatory rate limit (EIP 
Guidance, page 91). Clearly, these rules meet the definition of an EIP 
and it is, therefore, appropriate to apply the EIP Guidance. Any 
comments submitted by DE and CARB on the EIP Guidance were considered 
by us before finalization of the guidance and do not need to be 
reconsidered in the current context. The EIP Guidance is EPA's most 
recent guidance for economic incentive programs. It is being used to 
help ensure consistent interpretation of the CAA where its application 
to detailed EIP requirements is unclear.
    Comment #2: EM and BAAQMD state that formulation data is a reliable 
means for calculating a product's VOC content because manufacturers 
know how their products are formulated and that everyone understands 
what is required to calculate VOC content. SW and CARB state that 
defining the term formulation data is unnecessary because the EPA's 
National Volatile Organic Compound Emission Standards for Architectural 
Coatings (40 CFR part 59 subpart D, the National Rule) also allows 
formulation data to be used without including a separate definition for 
the term. SW adds and VCAPCD, SJVUAPCD, BAAQMD and CARB also comment 
that the VOC content is ultimately determined by testing with Method 24 
of appendix A of 40 CFR part 60. If EPA requires a definition of 
formulation data, DE would want EPA to state that formulation data is 
preferred over Method 24 because of the inherent unreliability and wide 
margin of error associated with Method 24.
    Response #2: While manufacturers may know exactly what goes into 
their products, they often report paint formulation data by indicating 
a range for each component within a product. These ranges may often be 
quite wide, making the particular VOC content of a product difficult to 
determine. The National Rule does not, in fact, have a separate 
definition for formulation data. As with all analytical methods, there 
is some uncertainty associated with Method 24; however, it is a 
reliable method that has gone through extensive quality assurance and 
round robin testing to ensure that it is replicable and reliable for 
determining VOC content. Because the National Rule and these rules 
ultimately rely on Method 24 to validate the VOC content of coatings 
for compliance purposes, we concur that a separate definition for the 
term formulation data is not necessary. As a result, we are not 
finalizing our concern regarding formulation data as a deficiency. We 
encourage DE to submit an alternative test method to EPA for 
consideration if they deem another method to be more reliable than 
Method 24.
    Comment #3: EM, SW, VCAPCD, BAAQMD and CARB comment that the sell 
through of averaged coatings is not problematic. SJVUAPCD, BAAQMD and 
CARB state that labeling on coatings indicating the date of manufacture 
and the coating's participation in an averaging program is sufficient 
to determine compliance. SW and CARB state that averaging plans 
calculate emissions based on shipments into the state and that all 
emissions are counted at the start of an averaging program even though 
the coating may not yet have been sold. EM claims that the standard 
sell through provision of all coatings is more problematic.

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    Response #3: EPA is primarily concerned with the sell through of 
averaged coatings because it may make certain compliance determinations 
difficult or impossible. In order to determine compliance for an 
averaged coating, an inspector would have to be able to associate the 
emissions from that particular can of coating with a particular 
compliance year. While a can of coating may have been manufactured 
within a certain compliance period, a manufacturer may not necessarily 
include it among the averaged emissions for that year. It is therefore 
important that each can of coating in an averaging plan be specifically 
attributable to a particular compliance year. The date code and other 
labeling on a coating does not provide this information. EPA notes, 
contrary to SW and CARB's claims, that several of these rules were not 
written such that the volume of coating used as the basis for emissions 
calculations is, in fact, the volume of coating sold [see sections A1 
of the CARB's Suggested Control Measure (SCM) and all rules, section 
A.3.3 of SCM, section 8.4.3 of SJVUAPCD Rule 4601, section AA.3.6 of 
VCAPCD Rule 74.2, section A.3.3 of SBCAPCD Rule 323, and section A.3.3 
of MBUAPCD Rule 426]. If at the end of a compliance period, a 
manufacturer finds that they have exceeded the allowable emissions, 
they may argue that some emissions from a coating that did not sell in 
the current compliance year should be advanced into the next compliance 
year because of sell through. Alternatively, if a manufacturer 
determined that more high-VOC products were sold than projected in 
their averaging plan, they could argue that they were sold under the 
sell-through provision.
    Comment #4: EM comments that the jurisdictional issue created by 
CARB approving, disapproving, renewing, modifying or terminating 
averaging programs could be seen as an extension of their advisory role 
to local air pollution control districts. VCAPCD, BAAQMD, and CARB 
comment that CARB is merely providing administrative functions. CARB 
notes that they are assuming some administrative functions at the 
request of the California Air Pollution Control Officers Association 
(CAPCOA). SJVUAPCD and CARB state CARB's involvement simplifies the 
implementation of averaging programs and that CARB's purely 
administrative role is clarified in a draft Memorandum of Understanding 
(MOU) between the districts and CARB. SJVUAPCD, BAAQMD, and CARB also 
note that the districts retain ultimate enforcement authority.
    Response #4: As currently written, these rules give CARB many 
decision making powers that have not been delegated to it. A draft MOU 
clarifying the responsibilities of the districts and CARB is 
unenforceable. If districts and CARB do not fulfill an enumerated 
responsibility described in the MOU, no agency, including EPA could 
take action to require the districts or CARB to perform that duty. 
Furthermore, while districts and CAPCOA may wish and agree to release 
these powers to the CARB, we have received no legal assurances that the 
CARB may assume these powers without an act of the State Legislature. 
EPA's recommendation to the districts to resolve this deficiency was to 
scale CARB's involvement to a more advisory role by structuring the 
program so that CARB would be responsible for making recommendations 
which each district would then formally adopt or reject. In this way, 
the districts, not CARB, maintain their authority as the decision 
making and regulatory body. Alternatively, we would consider a 
certification by the State Attorney General that CARB has these 
authorities. Furthermore, the district's ability to enforce an 
averaging program could be hampered if it was not the entity that 
originally approved the program.
    Comment #5: EM believes that the problem of not specifying exactly 
what records are being used to calculate emissions is resolved if 
manufacturers commit before implementing their averaging programs to 
use only one form of distribution as the basis for calculating 
emissions under an averaging program.
    Response #5: According to various provisions of these rules, 
averaging is a provision that operates on a statewide basis by a 
statewide agency, CARB. It is therefore most consistent to require that 
emissions calculations also rely on statewide data. Allowing 
manufacturers to choose to use either district-specific or statewide 
data gives them the ability to manipulate emissions calculations by 
choosing the data type that shows fewer emissions. We note, 
additionally, that the existing rules do not require manufacturers to 
select one form of distribution as the basis for calculating emissions.
    Comment #6: EM, VCAPCD, SJVUAPCD, BAAQMD, and CARB comment that 
under an averaging program, an exceedance occurs when the entire 
program shows on the whole that the actual emissions exceed the 
allowable emissions. The excess emissions cannot be attributable to any 
one product in the program.
    Response #6: It is precisely because excess emissions cannot be 
attributed to any one product that it must be assumed that all products 
under an averaging program that were sold with a VOC content greater 
than the effective VOC limit contributed to the exceedance. For 
example, if an averaging program balances the emissions from three 
coatings that exceed the limits of the rule against the emissions of 
two super-compliant coatings, then all three non-compliant coatings 
were partially responsible for the exceedance and a violation for each 
of these coatings should be assessed for each day of the compliance 
period.
    Comment #7: SW comments that EPA's proposed language for clarifying 
how violations of averaging provisions are determined would result in 
penalties that are too large and not in balance with the damage done to 
the environment. CARB comments that the magnitude of potential 
penalties under the current rule language is a sufficient disincentive 
for willful violations. BAAQMD states that any difficulties with 
enforcement and assessment of penalties can be corrected during the 
following compliance period.
    Response #7: EPA's proposed language would clarify that violations 
could be assessed for any coating that was sold above the limits of the 
rule. The benefits of allowing manufacturers to continue to sell 
coatings that do not meet the limits of the rule under an averaging 
program must be balanced by significant deterrents against non-
compliance. These rules currently limit the violations that can be 
assessed to only one per day. By clarifying the language in the rule, 
agencies may assess larger penalties, however, they are also in no way 
precluded from using their enforcement discretion to weigh the 
significance of the overall environmental damage to assess a penalty 
that is appropriate based on the overall circumstances of the 
violation.
    Comment #8: VCAPCD, SJVUAPCD, BAAQMD and CARB comment that the 
typographical errors in the rules should not be considered a 
deficiency, but a rule improvement issue, since the correct language 
can be determined.
    Response #8: We concur that the correct language can ultimately be 
surmised despite the typographical errors. As a result, we are not 
finalizing this issue as a deficiency.
    Comment #9: VCAPCD, BAAQMD, and CARB comment that all deficiencies 
associated with averaging become moot after 2005 when the averaging 
provisions of these rules sunset. CARB

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asserts that there are ultimately no SIP implications from these 
temporary programs.
    Response #9: EPA is required to ensure that SIP regulations fully 
comply with enforceability and other requirements of CAA section 110 
and part D. Because of the near-term sunset date of the averaging 
provisions, however, we concur that it will not be necessary to impose 
sanctions because the deficient rule provisions will vacate before the 
sanction clocks would expire. For further discussion see our 2003 
proposal (68 FR 47279).
    Comment #10: VCAPCD and CARB state that EPA should not examine the 
averaging programs based on the possibility that the averaging programs 
would be extended and notes that an extension of the averaging programs 
would require a revision to the rules through action by their 
respective Boards.
    Response #10: The evaluation of these rules was not based on the 
possibility of the extension of the averaging provisions. All 
evaluation of these rules was based on the programs as they exist under 
current rule language. EPA noted in our TSDs for these rules one 
additional recommendation to evaluate these programs after three years 
if the averaging programs were to be extended beyond 2005. We clearly 
stated that this was a recommendation to improve the rule and that it 
was not an issue affecting our current action.
    Comment #11: In response to Deficiency 5, VCAPCD and CARB 
comment that district-specific data is equally enforceable as statewide 
data. CARB believes that district-specific data should be allowed so 
that smaller regional manufacturers may utilize the averaging 
provisions of these rules.
    Response #11: Submitting statewide data does not prevent smaller 
regional manufacturers from averaging their coatings. If these 
manufacturers do not have sales in particular areas of the state then 
the sales in those areas would be assumed to be zero and statewide data 
could be generated. In part, we are concerned that the existing 
language would allow manufacturers to game the system and moderate 
overall emission calculations by using district-specific or statewide 
data, depending on whichever produced more favorable results. Also see 
Response 5.
    Comment #12: VCAPCD and CARB comment that the language that 
describes which records may be used to calculate emissions is 
sufficient for determining compliance when coupled with the Statewide 
Averaging Guidance Document and active cooperation with individual 
manufacturers. BAAQMD states that this language is meant to recognize 
the unique nature of a specific manufacturers' program and does not 
constitute executive officer discretion because the stringency of the 
rule cannot be affected by an administrative decision. SJVUAPCD 
comments that many rule provisions allow inspectors to verify the 
accuracy of records for determining compliance. CARB notes that a 
definition for enforceable sales record proposed by EPA is essentially 
what is being followed when approving acceptable records and cites this 
as an example of where EPA should have raised this concern earlier 
during the development of South Coast Air Quality Management Districts' 
(SCAQMD) Rule 1113.
    Response #12: These rules do not specify what records may be 
submitted as an enforceable record. Any record, including those that 
may be unverifiable, may be submitted to substantiate emission 
calculations and it is the purview of the Executive Officer to approve 
any of these records as acceptable. This unlimited executive officer 
discretion is unenforceable. There is currently no provision under 
these rules to verify the accuracy of a particular record before an 
averaging program is approved. While the Statewide Averaging Guidance 
Document may further delineate and limit the records that may be 
submitted, the Statewide Averaging Guidance Document is not an 
enforceable element of the SIP and could not be relied upon for 
enforcement purposes. EPA raised this concern regarding enforceable 
records to SCAQMD during the development of Rule 1113 in a May 13, 1999 
letter and notes that this provision was not proposed as an amendment 
to Rule 1113 until the March 31, 1999 Working Group meeting. This same 
concern was raised to the CARB in a June 21, 2000 letter after it 
proposed a similar provision in a draft of the SCM emailed on June 14, 
2000 for consideration. Although not relevant to this rulemaking, our 
review of these provisions as they were developed was timely and 
responsive.
    Comment #13: SJVUAPCD, BAAQMD, and CARB comment that the emissions 
reductions associated with these rules are valuable. CARB comments that 
these rules are significantly more stringent that the National Rule. 
SJVUAPCD asserts that approval of these rules would encourage other 
districts to adopt similar rules which could achieve up to 10 tons of 
emission reductions per day across California. CARB claims that EPA's 
proposed limited disapproval of these rules is discouraging districts 
from submitting their architectural coating rules as SIP revisions. 
BAAQMD indicates that the development of the SCM and these rules were 
the result of over two years of work and that the difficulties 
historically encountered in adopting architectural coatings rules 
should be balanced against the marginal benefits of EPA's suggested 
rule changes.
    Response #13: EPA does not dispute that these rules reduce VOC 
emissions by putting more restrictive VOC content limits into effect 
for architectural coatings and we recognize the significant efforts of 
the CARB and districts to develop the SCM and these rules modeled on 
it. At the same time, EPA's role is to ensure that all rules approved 
into the SIP meet the statutory requirements of the CAA. Because these 
programs provide the regulated industry considerable compliance 
flexibility, this must be balanced by enforcement certainty and 
adequate penalties for non-compliance. It is not EPA's intention to 
discourage the submittal of similar rules, and note that no sanctions 
will be imposed due to our action on these rules. Also see Response 
9.
    Comment #14: BAAQMD comments that EPA should have submitted 
comments to CARB and districts at the time of SCM adoption or shortly 
thereafter. CARB comments that the averaging provisions in these rules 
were based on SCAQMD Rule 1113 and that timely action by EPA on 
SCAQMD's February 18, 2000 submittal of Rule 1113 would have allowed 
the districts to consider EPA's concerns when they were adopting their 
rules.
    Response #14: EPA did participate in the regulatory development 
process for the SCM and SCAQMD's Rule 1113. We note that the bulk of 
the deficiencies that we have identified in these rules relate to the 
averaging program which was added to the SCM one week before the SCM 
was adopted by the CARB. After only limited review, EPA did express 
concerns regarding the program to the CARB before adoption of the SCM. 
We were informed that our issues would be addressed through various 
means such as the Statewide Averaging Guidance Document and the MOU. 
The discussions with CARB and districts during the development of these 
documents has, instead, brought even more issues to light. EPA notes 
that our comments during rule development are not final and that our 
ultimate evaluation and approval or disapproval of rules only occurs 
after formal submittal. EPA did receive submittals of SCAQMD's Rule 
1113 on February 18, 2000 and on December 14, 2001. The CAA prevents 
EPA from acting on the 2000 submittal of Rule 1113. EPA is

[[Page 38]]

only allowed to act on the more recent 2001 submittal since this is the 
district's most current regulation for this source category. EPA was in 
the process of acting on the SCAQMD's 2001 submittal when that version 
was recently vacated by the Court. National Paint and Coatings 
Association, Inc. v. SCAQMD, (June 24, 2002, G029462). Also see 
Response 12.
    Comment #15: CARB notes that confirmation of the volume of high VOC 
products sold is additional information that is not typically required 
for determining compliance with architectural coatings rules but that 
it is similar to the additional record verification that is necessary 
to determine compliance with the National Rule's exceedance fee and 
tonnage exemption options.
    Response #15: Determining a manufacturer's compliance with an 
averaging program requires knowing the total volume sold to verify that 
the actual emissions do not exceed the allowable emissions. This cannot 
be accomplished and compliance cannot be determined if reliable and 
specific sales records are not required and available. Also see 
Responses 3 and 13.
    Comment #16: CARB comments that EPA's proposed language to rectify 
Deficiency 2 by clarifying that records must be made available 
to the Executive Officer upon request is equivalent to the current rule 
language. CARB contends that requirements on manufacturers to describe 
the records being used to calculate coating sales under averaging 
programs are sufficiently specific and do not represent executive 
officer discretion.
    Response #16: The current language in these rules is not equivalent 
to EPA's proposed language. While the current language requires that 
records be maintained, there is currently no language requiring that 
these records be surrendered to the Executive Officer.
    Comment #17: CARB states that the public release of sales data is 
not necessary to demonstrate compliance. While CARB believes that all 
emissions data should be made publicly available, they argue that sales 
data which does not constitute ``emissions data'' is confidential and 
not necessary for determining compliance.
    Response #17: EPA's proposed limited disapproval actions did not 
specifically identify California's treatment of information claimed 
confidential as a deficiency. Rather, Deficiency 2 focuses on 
the fact that the California rules do not specify which records must be 
maintained to quantify sales. It may well be, as CARB believes, that 
the rules can be revised to provide adequate certainty about record 
maintenance without changing California's treatment of certain records 
as confidential material. Also see Response 15.

III. EPA Action

    As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is 
finalizing a limited approval of the submitted rules. This action 
incorporates the submitted rules into the California SIP, including 
those provisions identified as deficient. Several submitted comments 
did change our assessment of the rules as originally described in our 
proposed actions. Therefore, as authorized under section 110(k)(3), we 
are only finalizing the five deficiencies identified in our 2003 
proposal (68 FR 47279), and these five deficiencies apply to all seven 
rules. Sanctions will not be imposed under section 179 of the Act 
according to 40 CFR 52.31, even if EPA does not approve subsequent SIP 
revisions that correct the rule deficiencies within 18 months of the 
effective date of this action because, according to specific language 
incorporated into the rules, the deficient provisions will expire in 
January 2005, in advance of the end of the 18-month period allowed to 
correct the deficiencies. Similarly, EPA also will not promulgate a 
federal implementation plan (FIP) under section 110(c) if subsequent 
SIP revisions that correct the rule deficiencies are not approved 
within 24 months. Note that the submitted rules have been adopted by 
the local agencies, and EPA's final limited disapproval does not 
prevent the local agencies from enforcing their rules.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866, entitled ``Regulatory 
Planning and Review.''

B. Paperwork Reduction Act

    This rule does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 
et seq.)

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    This rule will not have a significant impact on a substantial 
number of small entities because SIP approvals under section 110 and 
subchapter I, part D of the Clean Air Act do not create any new 
requirements but simply approve requirements that the State is already 
imposing. Therefore, because the Federal SIP approval does not create 
any new requirements, I certify that this action will not have a 
significant economic impact on a substantial number of small entities.
    Moreover, due to the nature of the Federal-State relationship under 
the Clean Air Act, preparation of flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of state action. The 
Clean Air Act forbids EPA to base its actions concerning SIPs on such 
grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 
42 U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate, or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the approval action promulgated does not 
include a Federal mandate that may result in estimated costs of $100 
million or more to either State, local, or tribal governments in the 
aggregate, or to the private sector. This Federal action approves pre-
existing requirements under State or local law, and imposes no new 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental

[[Page 39]]

Partnership). Executive Order 13132 requires EPA to develop an 
accountable process to ensure ``meaningful and timely input by State 
and local officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely approves a state rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This final rule does not have 
tribal implications, as specified in Executive Order 13175. It will not 
have substantial direct effects on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes. Thus, Executive Order 13175 does not 
apply to this rule.

G. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    Protection of Children from Environmental Health Risks and Safety 
Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is 
determined to be ``economically significant'' as defined under 
Executive Order 12866, and (2) concerns an environmental health or 
safety risk that EPA has reason to believe may have a disproportionate 
effect on children. If the regulatory action meets both criteria, the 
Agency must evaluate the environmental health or safety effects of the 
planned rule on children, and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it does 
not involve decisions intended to mitigate environmental health or 
safety risks.

H. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a 
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's 
action does not require the public to perform activities conducive to 
the use of VCS.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
section 804(2). This rule will be effective February 2, 2004.

K. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by March 2, 2004. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

    Dated: November 17, 2003.
Alexis Strauss,
Acting Regional Administrator, Region IX.

0
Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart F--California

0
2. Section 52.220 is amended by adding paragraphs (c)(293)(i)(B), 
(c)(297)(i)(A)(5), (c)(297)(i)(E), (c)(297)(i)(F), (c)(300)(i)(B), 
(c)(300)(i)(C), and (c)(315)(i)(C) to read as follows:


Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (293) * * *
    (i) * * *
    (B) Yolo-Solano Air Quality Management District.

[[Page 40]]

    (1) Rule 2.14, adopted on November 14, 2001.
* * * * *
    (297) * * *
    (i) * * *
    (A) * * *
    (5) Rule 74.2, adopted on November 13, 2001.
* * * * *
    (E) San Joaquin Valley Unified Air Pollution Control District.
    (1) Rule 4601, adopted on October 31, 2001.
    (F) Santa Barbara County Air Pollution Control District.
    (1) Rule 323, adopted on November 15, 2001.
* * * * *
    (300) * * *
    (i) * * *
    (B) Bay Area Air Quality Management District.
    (1) Rule 8-3, adopted on November 21, 2001.
    (C) Monterey Bay Unified Air Pollution Control District.
    (1) Rule 426, adopted on April 17, 2002.
* * * * *
    (315) * * *
    (i) * * *
    (C) Mojave Desert Air Quality Management District.
    (1) Rule 1113, adopted on February 24, 2003.
* * * * *
[FR Doc. 03-32212 Filed 12-31-03; 8:45 am]
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